Throughout the United States, most attorneys who practice in the area of personal injury law charge a contingency fee of 1/3 of the gross settlement amount. In fact, in some states, the attorney cannot charge more than this. Normally, an attorney who settles a case without having to file a lawsuit, will charge 1/3 of the gross settlement amount as his attorney fee. If the attorney does not settle the case at all, then he should not charge the client anything for his time. Only, if the contingency is met (which is getting a recovery for the injured client) will the attorney get paid for his work.
If the insurance company fails to offer a settlement or denies the claim for some reason, then the attorney can file a lawsuit in the District Court. After a lawsuit is filed, then most attorneys charge 40% of the gross recovery as an attorney will have to work more and has more at risk in costs of litigation. Personal injury attorneys normally will advance all the costs in bringing a case to settlement or to a jury trial. So, normally the client is not asked to pay costs up front and the attorney will recover his costs out of the eventual settlement.
Some attorneys in Colorado charge more than 1/3 of the gross settlement and may try to charge you 35% or more. I personally believe this is too high of a percentage and would recommend that all injured clients stick with an experienced personal injury attorney who charges only 1/3 pre-suit and 40% after a lawsuit is filed. Do not let an attorney charge you more than these “normal” fees. If an attorney tries to charge you more in fees, then I believe this attorney is overcharging and this is bad for the lawyer profession. Please do not hire an attorney who tries to overcharge you from the very start.
Different Types of Fee Agreements
The most common fee agreements are hourly, fixed or contingent. An hourly fee agreement is where the attorney keeps track of all time and the client is responsible for paying that hourly rate and the costs – regardless of the final result in the case. A fixed fee is a specific amount that is set and agreed upon by the client and attorney and again, the client is responsible for paying that fixed fee and costs – again, regardless of the final result in the case. A contingent fee agreement, which is most commonly used in a personal injury case provides for a certain percentage going to the attorney out of the recovery. In this type of arrangement there are no up-front costs or fees paid by the client. The attorney gets the agreed upon percentage from the gross amount collected for the client and costs are reimbursed to the attorney from the gross amount. Most personal injury law firms charge 1/3 percentage on contingent fee agreements settled prior to filing a lawsuit. If there is no recovery, the attorney receives nothing. The goal of the attorney is to maximize the settlement recovery for the client, which also maximizes the percentage of recovery for both the attorney and client.
It is our experience that settlements with insurance companies tend to increase in value when they have an experienced attorney handling their claim. Insurance companies have an obligation to put you back in the position you were in prior to the accident. Insurance companies like you to believe they are helping you and that they are on your side, but their goal is to minimize their exposure and pay as little as they can in settlements; looking out for their own profit margins. Insurance companies make money by not paying you for what your claim is worth.
There will be some cases that are very small in nature and will not be financially worthwhile to pursue at the Court House. We understand that every injury case is extremely important to the injured client and we will work as hard as we can to get you the best recovery. However, some cases must be settled prior to entering the court house just based on costs and the time consuming process of litigation which could take 1-2 years or more. Some counties are notorious for very low personal injury verdicts while other counties are more favorable to personal injury victims. We can search the jury verdicts in each county and see where your injury and liability situation would stand if we have mutually decided to take the case to Trial